Our experts

Karen Holmes

Turn2us Welfare Benefits Specialist

Simon Reed

Personal Finance Editor at The
Independent

Melanie Bien

Director of Communications at Private Finance

Redundancy and
insolvency

I am a single parent and my son is 12. At the moment I
am employed and earn £13,000 per year which entitles me to Working
Tax Credit/Child Tax Credit and Housing Benefit. The company I work
for is on the verge of going into liquidation. This means I
sometimes do not receive my wages on time and my wages cheque often
bounces. I am running the risk that it will suddenly cease owing
me money. What are all the benefits that I would be entitled
to and how quickly would they come through?
(Sarah)

Karen Holmes: If your employer ceases
business and you are owed wages you can make a claim to the
National Insurance Fund, administered by the Insolvency Service (link opens in a
new window). As well as redundancy pay, the fund can cover
wages, holiday and notice pay that are due to employees but the
employer has been unable to pay. To do this you must first write to
your employer asking for the money owed. If this isn't successful
then you should fill out an RP1 form (link
opens in a new window). You may want to look at the Insolvency
Service publication Redundancy and Insolvency: A Guide for
Employees (link opens in a new window PDF file size
481kb) for further information. 6 September 2011:
Publication no longer available, see Gov.UK - Redundancy: your
rights (link opens in a new window) instead.

If you were unemployed and seeking work you could make a claim
for
Jobseeker's Allowance. By putting your details into our
Benefits
Calculator you will find out what other benefits you may be
entitled to. You may also receive
Working Tax Credit for a 'run-on' period of four weeks. This
can be arranged when you notify HM
Revenue and Customs (HMRC) that you are no longer working.
It is not possible to give a guarantee about how long a new
benefit claim will take to go into payment, but providing all
evidence required promptly will prevent any delay in the
process.

My wife has just been made redundant. My income as self
employed is £36k pre-tax. Are we entitled to tax credits?
(David)

Karen Holmes: Based purely upon the
information you have provided your income is too high to qualify
for Working Tax Credit but if you have children you could
qualify for Child Tax Credit. For an accurate assessment of your
benefit entitlement use the Turn2us Benefits
Calculator where you can input all relevant personal
details.

I have a friend who has been working in the UK
for three years. He has recently been told that he could be
facing redundancy due to cuts. He is from New Zealand and here on
an Ancestral Visa. What is he potentially able to claim in
benefits?(Sam)

Karen Holmes: When qualifying for some
visas, including the UK Ancestry Visa, you have to show that
you can support yourself without needing any help from public
funds. People who have the 'no recourse to public funds'
restriction on their visa cannot claim most benefits, Tax
Credits or housing assistance that are paid by the state. However,
'public funds' does not include benefits that are based on national insurance contributions, such as
contribution-based Jobseeker's
Allowance. If your friend has been paying national
insurance contributions for three years, he may be
entitled to this if he is made redundant. People should seek
specialist benefits advice when immigration status is a factor.
Turn2us have a Find an Adviser tool to
help locate a local adviser.

Help with mortgage
when made redundant

My wife and I have a mortgage in both our names. It
is half a repayment and half an interest only mortgage. We both
work in higher education and our respective contracts could well
not be renewed next year. Would we be entitled to any help with our
mortgage if the worst comes to the worst and we are made redundant?
(David)

I was made redundant a few weeks ago. Although the
redundancy payment and my husband’s income is enough to keep us
secure for a couple of months, my main concern is how we’ll cover
the mortgage payments if I don’t get another job quickly and the
savings run out. (Anon)

Melanie Bien: Hopefully, in telling your lender
that you have lost your job, it would be reasonable for them
to agree to lower monthly mortgage payments until you have
another job or they may agree to a payment holiday whereby you have
several months 'off' until you find another job. The lender might
freeze the interest you would normally pay during this time, so you
don't run up an even bigger debt, or it might not, depending on its
terms and conditions. It is the last resort for a lender to
repossess a property. What they really want is for you to pay your
mortgage, so you need to talk to them to find a solution. It is
worth having this conversation as soon as possible.

I was made redundant six months ago. I have found
another job but the pay is half what I was earning before and I am
struggling to pay my mortgage and other costs. I don’t want
to lose my flat as my little boy is settled in school here so what
can I do? I’ve heard of some Government schemes but don’t
really know if I’d qualify. (Sylvia)

Melanie Bien: One option is a Government scheme
called Homeowner's Mortgage Support (link opens in a new window).
This allows homeowners to delay paying up to 70 per cent of the
interest on their mortgage for up to two years. It's designed to
help those who are having trouble keeping up with their repayments
because their household income has fallen temporarily. You would
need to switch to an interest-only mortgage (if you are not on one
already) and then the interest you do not pay while on the scheme
is added to your outstanding mortgage so you will have to repay it
eventually. As such, it is only a temporary situation
- suitable if you are confident that your financial situation
is going to improve over the next couple of years. Update October
2012: This scheme is no longer available.

If you would still struggle with these lower payments and need a
more long-term solution, the Mortgage Rescue Scheme may be worth a
look. With this you will either get a shared equity loan or offered
help from a 'mortgage to rent' scheme, whereby a local housing
association buys your property and rents it back to you. This is
not the same as a sale-and-leaseback scheme, which is offered by
private, profit-making companies and should be avoided if
possible.

You should seek specialist advice before making a decision and
speak to your lender about the options available.

Redundancy
and debt repayment

I'm being made redundant at the end of March. I'm 23 and
am hopeful of getting some work quickly but realise it is tough at
the moment. Luckily I live with my parents so I don't have to worry
too much about household costs. However, I do have a loan and a few
credit cards and there's no way I can cover nearly £200 per month
in repayments when I only have Jobseeker's Allowance coming in.
Will the bank/lenders be flexible or am I in trouble if I
don't find the money, I'd like to know what to expect before I
contact them. (Alex)

Simon Read: If you show responsibility towards your
debt and propose a repayment plan, most lenders should listen.
However, you may not be able to offer them enough to keep them
happy. You'll need to work out your budget - how much cash you have
to pay towards debts after meeting your essential commitments. If
what you propose is too low, then you should get free expert help
from any Citizens Advice bureau (use Turn2us
Find an Adviser to find your local one) or
the StepChange Debt Charity (link opens
in a new window). They can help you set up an informal debt
payment plan and deal with lenders on your behalf. Crucially they
may be able to negotiate a freezing of interest charges and fees so
that the debt doesn't continue to grow.

One thing to think about is any redundancy payment you get.
Using the cash to reduce debts can help, but you should pay off the
most expensive debt first, which is likely to be credit cards.

Another bit of advice? Tear up your credit cards so you're not
tempted to get further into debt.

Redundancy and
reducing outgoings

My employer went into receivership on 19th January. I
applied for Jobseeker's Allowance and have been offered £65 per
week but have found some casual work at a fraction of normal salary
but better than £65 per week. The Child Tax Credits
office told me that I couldn't claim anything until new
tax year as I have earned too much this tax year already. My
mortgage company and bank cannot/will not help to reduce mortgage
payment or charges now being incurred on account. Any thoughts on
how to temporarily reduce outgoings until income recovers would be
appreciated. (Warren)

Simon Read: Reducing outgoings is difficult. Where
can you cutback? Have a look at all your outgoings and think
seriously about what you could do without. Do you have satellite
TV, for instance? Switching to Freeview could save some cash. In
fact switching other providers could help cut costs, such as your
energy firm or phone service. There are comparison websites for all
of these where you can input your details and see if there is a
cheaper alternative.
If tinkering with your budget isn't going to help much, then
you may need to seek out professional advice to help you negotiate
with lenders. The debt charity StepChange Debt Charity (link opens
in a new window) has a 'Debt Remedy' feature on its
website which takes 20 minutes to complete, but could point you in
the right direction. The trained debt counsellors can negotiate
with your bank or mortgage company if you are experiencing real
difficulties and may be able to persuade them to let you take a
short payment holiday or freeze interest charges to help you
through some difficult times.

Redundancy and
pensions

I was due to retire in five years after 30 years in
my current job. Unfortunately, chances are redundancy is now on the
cards as the company is struggling. My question is what will happen
to my final salary pension if my employer goes bust. Will I still
get it all? Some of it? (Alan)

Simon Read: A final salary pension scheme is based
on the number of years you've worked at the company and your salary
at retirement, or when you leave if earlier. So if you were made
redundant now, your payouts will be based on your salary now.

However you may have a decision to make if you're made
redundant now and your firm is fine - retire early and take
your pension now or you could simply leave your pension with your
employer until you do retire. If you get a new job you may be able
to transfer your pension into the new company's scheme or your
pension contributions into your own personal pension. However, it
is likely to be best to leave your contributions in the scheme, as
taking them out will mean losing some of the benefits.

I've been with my employer for just over a year but
there is talk of restructuring the department I work in and
possible redundancies. If I'm made redundant what happens to the
pension scheme I've been paying into via my wages, I've only been
paying into it for 9 months, has this money been wasted?
(Caroline)

Simon Read: It's not wasted as you should get
the cash back. Normally if you have been a member of your company's
pension scheme for less than two years and you are made redundant,
your pension rights are cancelled and your contributions are
returned to you. However you won't get any contributions made by
your employer returned to you and your refund will have tax
deducted from. It might be a good idea to use the cash to start a
personal pension.

Redundancy and
support

For the last eight years I have worked in the
voluntary sector, providing help and support to those in need. For
the last year I have been on a short term contract that ends next
month as there is no funding to continue the post. We had to go to
a debt management company to sort out our unsecured debts. I am now
worried about our mortgage. We had Payment Protection Insurance
(PPI) on the mortgage but cancelled it because we could not afford
to pay it. I know the first course of action is inform the mortgage
company, I know I will be able to claim benefits but I have never
been unemployed and this is all alien to me. I wish there were
support groups locally that could provide moral support
and people to share your experiences.
(Kirk)

Melanie
Bien: You will need to speak to your lender but before
doing that, you should find out exactly what benefits you are
entitled to. You can use the Turn2us Benefit
Calculator.

Karen Holmes: As well as checking your benefit
entitlement, you may wish to use our Grants
Search database to see if you are eligible for help from a
charitable fund, based on your personal circumstances, background
and needs.

Though we don't have details of your
local area there are online communities for those experiencing
unemployment such as JoblessJoe (link opens in a new
window), which aims to be a positive and supportive community
for discussion as well as having resources for finding work. Here
you may be able to communicate with others in a similar
position.

Grants
for qualifications

I was made redundant in August last year. The jobs I
apply for seem to require a certain qualification so I
think it necessary to get this to vastly improve my chances of
employment in the near future. I receive Jobseeker's Allowance but
that is all. The cost of the course is £2000. Would there be a
grant to help me pay for the cost? (Amanda)

Karen Holmes: The Turn2us Grant
Search tool helps you search a database of over 3,500
charitable funds and refine your search by set criteria, for
example, your personal background, location or the specific help
required. By searching under the criteria of 'course fees' 177
results are returned. Every fund has a different purpose and
eligibility criteria - some depend on the course or the
institution, others on your location. Why not use this tool to see
if you are eligible for any of the grants. When it comes to grants
and assistance from the Government, such as the Adult Learning
Grant, see the Gov.UK
information on adult learning (link opens in a new
window).

The opinions expressed are those of the expert only. The answers
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